The worlds top ship broking firms

So who are the worlds best shipbroking firms? This is a subjective question and in my oinion depends on a number of different criteria. I have my own views but guess what? lloyds List (the great shipping newspaper) decided to have a crack at this thankless task earlier this year (2012). I agree with some on the list but I disagree with others........but then again they havent devulged criteria - so its meant to be fun anyway.

 

This would appear to me to be the perfect segway into 2013.....

 

Here is the what Lloyds had to say  

 

quote

Brokers by the dozen

 

It’s a tough job but someone has got to do it – here are our top 12 shipbroking companies

 

PUT simply, shipbroking is not as easy it used to be. The newbuilding boom might have seen a huge surge in the number of ships on the water needing to be chartered and sold but it has also caused a dramatic plunge in freight rates and subsequently brokers’ commissions. We have expanded our list this year to create a broker’s dozen, which is not to be confused with a baker’s dozen.

1. Clarksons – Andi Case
Regarded across the industry as the biggest shipbroker, Clarksons and its chief executive Andi Case have retained their top spot on our list in 2012. Despite the departure of the brand’s most famous spokesman Martin Stopford in May, the broker’s dominance in the global market remains due to its head count, geographical spread and coverage across all sectors.

2. RS Platou – Peter Anker
There might not have been much movement on RS Platou’s previous plans to go public but the Peter Anker-led Norwegian broking and financial services group continues to strengthen its portfolio. Positioned well for the gas and offshore boom, the group has expanded into key growth markets and building its research and equity offering.

3. Braemar Shipping Services – James Kidwell
A change at the top for Braemar Shipping Services this year, with the London-listed group now headed up by chief executive James Kidwell – formally the financial director. Former head Alan Marsh has returned to the sale and purchase desk, while the broking business is now being run by Sebastian Davenport-Thomas.

4. ICAP Shipping – Henry Liddell
Seeing the most upward movement on our list this year is ICAP Shipping, the maritime division of the world’s largest interdealer broker, due to its expansion into emerging markets through acquisitions. In 2012, chief executive Henry Liddell has led two major purchases – Singapore-based tanker specialists Island Shipbrokers and CTI Shipbrokers in India and Dubai, which focus in dry bulk , tankers, sale and purchase and offshore. Today, global staff numbers total almost 230, including 73 acquired through the two deals.

5. SSY – John Welham
Low-profile Simpson Spence & Young continues to offer strong broking and research services, particularly in its specialist area of dry bulk. SSY has made a name for itself as the go-to source for port congestion information, with its capesize and panamax data much sought after.

6. Maersk Broker – Jørn Steen Nielsen
Sticking in the middle of our list this year is Copenhagen-headquartered Maersk Broker. Despite namesake Maersk Line opening up container business to rival brokers Clarksons and Howe Robinson last year, it still has gravitas in the box broking sector as well as dry bulk and tankers.

7. Poten & Partners - Michael Tusiani
Well-positioned for the North America oil and gas boom is New York-headquartered Poten & Partners, headed up by Michael Tusiani, which has moved up our list this year. The company has built up a reputation for top quality broking and research on the energy sectors, particularly with regard to tankers and gas carriers. The employee-owned company known for its leading presence in the asphalt market.

8. Gibson – Nigel Richardson
Managing director Nigel Richardson continues to head up the private broking arm of publicly-listed energy services provider Hunting. Strong on tankers, specialist cargoes and gas, Gibson is on speed-dial for many people in the shipping industry looking for energy expertise. Its strong research team, sale and purchase desk and dry bulk business compliment

9. BRS – Tim Jones
Barry Rogliano Salles chief executive Tim Jones looks after almost 200 employees across its headquarters in France as well as other offices around the world. Well-positioned, the Neuilly-based company works across the eight main areas of broking – newbuilding, offshore, sale and purchase, dry bulk, containerships, tankers, chemicals and gas.

10. ACM Shipping – Johnny Plumbe and James Gundy
Johnny Plumbe has recently passed on the chief executive baton to James Gundy, who has been with London-listed ACM for 18 years and has headed up its very large crude carrier desk. Plumbe has not left the building though, and is now executive chairman, ensuring that his 37 years of broking experience is still put to good use.

11. McQuilling Partners – John Schmidt
Just a look at the US-headquartered McQuilling group’s office locations hints at where the broking services group sees growth opportunities – its Singapore-based business has rapidly grown over the last two years and four of its nine global offices are located in Central or South America, including Caracas, Lima, Mexico City and Rio de Janeiro.

12. Howe Robinson – Daniel Lewis & Peter Kerr Dineen
Maintaining a low profile is dry bulk and container specialist Howe Robinson. Well known for their boxship expertise and also knowledge in the grains market, this global company has a great reputation.

Unquote

Article here http://www.lloydslist.com/ll/news/top100/brokers/


Yours
The Virtual Shipbroker

(VS and Andy Jamison are the pen names, and creation, of ex shipbroker Nick van der Hoeven)

Happy Festive Season to All

To all the supporters of the blog - here is wishing you all a Merry Christmas, a safe New year and best wishes for 2013.

Lets hope I am not 12 hours too early and we all survive armaggedon. I am not panicking but as a precaution I have moved myself and the family to a small French Village, we have stocked up on baked beans, candles and batteries. I started building an arc but my wife reminded me that I have trouble changing a lightbulb - so I was being a little presumptious.

Im relaxed leading upto the 21st of DEC.

It has been a interesting year for shippng - low markets, consolidation, world recessions.....and probably more of the same for 2013. But guess what??? Most of us are still here. The Blog readership continues to grow, and I have a few exciting projects that you will be made aware of as the new year unfolds.

Thanks again to everyone

Time to PARTY!

The Virtual Shipbroker

This weeks market

 

Dec 13 (Reuters) - The Baltic Exchange's main sea freight
index, which tracks rates for ships carrying dry
commodities, fell on Thursday as capesize rates extended a drop
the previous day.

The overall index, which reflects daily freight market
prices for capesize, panamax, supramax and handysize dry bulk
transport vessels, fell 3.27 percent to 799 points.

The Baltic's capesize index fell 2.47 percent to
1,407 points.

Average daily earnings for capesizes, which usually
transport 150,000 tonne cargoes such as iron ore and coal, were
down $731 at $6,893.

Capesize rates plunged on Wednesday by about 12.4 percent,
driven by a dip in transatlantic round voyage rates. Vessels
ballasting into the Atlantic have been putting severe pressure
on round voyage rates.

Iron ore prices reached their highest since July as
steelmakers replenish stocks in the world's top consumer, China,
but weak steel prices are likely to limit gains in the raw
material.

Iron ore shipments account for about a third of seaborne
volumes on the larger capesize vessels, and brokers said that
price developments remained a key factor for dry freight.

The panamax index fell 2.57 percent, with average
daily earnings down $181 at $6,919.

The Pacific market has been weak for panamax vessels, Andy
Jamison, shipping blogger and owner of the Virtual Shipbroker,
said. 'Shipowners face uncertain questions with regard to where
they should ballast their ships,' Jamison said.

Average daily earnings for handysize ships were down $14
$6,542, while those of supramax ships were down $27 at $7,795.

(Reporting by NR Sethuraman in Bangalore; editing by Jane
Baird)

My latest market commentary

Reuters latest with some spice from yours truely

Qte

Nov 27 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry commodities, rose on Tuesday helped by slightly higher rates for panamax ships.
The overall index, which reflects daily freight market prices for capesize, panamax, supramax and handysize dry bulk transport vessels, rose 0.27 percent to 1,097 points.

The panamax index rose 0.2 percent, with average daily earnings up $10 at $8,163.
Panamaxes typically transport 60,000-70,000 tonne cargoes of coal or grain.

Sentiment for panamax vessels remains positive overall for the next few weeks but could change if we do not see any new shipments hit the market, said Andy Jamison, shipping blogger and owner of the Virtual Shipbroker.

Pre-winter stocking has taken place and coal inventories are up in China, Jamison said.
After a positive couple of weeks there seems to be a softer feeling to the Atlantic market, Jamison said.

However, he expects the panamax market to hold up a little longer as there is still a plenty of operators in the market for coal stems.

The Baltic's capesize index fell two points to 2,275 points.

Average daily earnings for capesizes, which usually transport 150,000 tonne cargoes such as iron ore and coal, were down $66 at $16,291.

Shanghai steel futures touched two-month lows on Tuesday as winter reduced demand from the construction sector in top consumer China and sent spot prices for raw material iron ore to their weakest since October.

Iron ore shipments account for around a third of seaborne volumes on the larger capesizes, and brokers said price developments remained a key factor for dry freight.
Average daily earnings for handysize ships were up $70 at $6,468, while those of supramax ships were up $102 at $7760.

 Unqte

The Virtual Shipbroker

VS and Reuters update on the markets

Thu Nov 8, 2012 10:19am EST

Nov 8 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry commodities, remained flat on Thursday as capesize rates recovered and panamax rates slipped further.

The overall index, which reflects daily freight market prices for capesize, panamax, supramax and handysize dry bulk transport vessels, remained at 916 points from Wednesday.

The Baltic's capesize index rose 1 percent to 2,119 points.

Average daily earnings for capesizes, which usually transport 150,000 tonne cargoes such as iron ore and coal, were up $140 at $13,685. Capesize rates recovered after falling for six straight sessions.

Iron ore rose to its highest in more than three months and traders upped offers on Thursday for cargoes for sale to top buyer China, hoping to sustain what has been a gradual increase in prices, with steel demand largely stable.

Iron ore shipments account for around a third of seaborne volumes on the larger capesizes, and brokers said price developments remained a key factor for dry freight.

The panamax index fell 1.49 percent, with average daily earnings down $84 at $5,820.

Panamaxes typically transport 60,000-70,000 tonne cargoes of coal or grain.

"The Atlantic market is horrible and holding the indices back," Andy Jamison, shipping blogger and owner of the Virtual Shipbroker, said.

The outlook does not look great in the mid-term with crop estimates slashed in the U.S and the Black Sea, Jamison added.

Average daily earnings for handysize ships were down $44 at$6,045, while those of supramax ships were down $26 at $6,735. (Reporting by NR Sethuraman in Bangalore; editing by Keiron Henderson)

White men cannot shipbroke?

From a reader of the blog (i have changed one or two items to protect the identity)

 

 

Quote

 

Dear Sir,

How are you? Last time we did communicate via mail regarding my traineeship and I have another question to ask you.

Just want to share with you the company is good and the people is nice. I really enjoy working there and they currently assign me to the operation desk and hopefully will move to chartering desk in the future.

However, I faced a big barrier in this field, I can drink and social but just can't dance in the nightclub with my colleagues. I found my body is too stiff to move with the music and the way they dance looks quite stupid and silly. Two of my male colleagues seem to not so respect me due to my inability to dance.

My doubt is does dancing is one of the social skill that a successful shipbroker must possessed?

Please sir shred some light or opinion on my doubt. I trying my very best in this field but I feel it is like a dead end for me.

Thanks and good day.

Yours faithfully,
Twoleftfeet

Unquote

My father once said "Son - if you are crap at something - do something else"...

Alternative strategies I recommend

1. Do not even attempt to dance. Tell your colleagues that you have lower back problems, or you have a pulled hamstring from playing football.

2. Tell them that only sissies dance and then over compensate by drinking more beer than all the others put together.

3. Don't let your lack of coordination worry you. No one really cares if you can or cannot dance. Be content to sit at the table and smile at everyone else making fools of themselves. This is my modus operandi and I am sure it will work for you!

4. Watch this video and learn some moves

Yours
The Virtual Shipbroker

Time charter equivalent

Hi All - sorry for my Slackness - been on a family vacation. Lots of sun, surf and seafood....

For all those who have sent me messages I am wading through those now. Expect a reply soon

otherwise here is a good post from a reader

AnonymousOctober 5, 2012 5:28 AM

Excellent blog - will definitely get the ebooks - in the meantime, can you define clarify the terms "Worldscale" and "Time Charter Equivalent" and how shipping companies derive/arrive at these figures when they report their financial results.....?

ReplyDelete

The Virtual ShipbrokerOctober 7, 2012 8:19 PM

Hi - Worldscale is a tanker ship term. Not my gig! Basically its a way of pricing the ships. Time charter equivalent refers to price of a ship on a daily basis. So if a ship charged say 50 bucks per metric tonne to carry 50,000 mt of coal - that will have some kind of time charter equivalent - whihc means an equivalent daily rate which could be for example USD 10,000 per day.

There is no way you can figure out if the Time charter equivalent rates are kosher without knowing how to do a voyage calculation and without having all the cargo and ship details. So bottom line is you need to accept what the reports are telling you.

Hope this helps - and yes do buy my books! Keeps my children in food and clothing for another week.

VS

Update - check out my voyage estimation Tutorial - the best in the business for explaining these concepts

Click here

A word or two about CARGO TOLERENCE

In bulk shipping we try and avoid absolutes. Cargoes come in so many different shapes and sizes as do the ships that carry them.

Think about this....

You sell a very large amount of wheat to the middle east.....but when you sell it you have no idea at this early stage which ship will be carrying this wheat. Infact the shipment may not take place for 2 or 3 months so in reality it could be one of hundreds if not 1,000's of ship in the world fleet that could potentially carry this cargo.

So the problem arises.....If you do not know which ship will carry your cargo how then can you be sure that you will find the perfect ship in 2 months time? What if the only ship available is a little too big or a little too small?

Solution - when you sell the cargo allow for a TOLERENCE in the amount sold.

Eg Instead of selling exactly 20,000 mt of wheat to the middle east let the contract say 20,000 mt with a tolerence of 10 pct more or less.....depending on the ship that is nominated.

That way you can solicit offers from ships that can carry anything bewteen 18,000 and 22,000 mt.

You can see that this offers far more flexibility than trying to find the perfect ship that will carry exactly 20,000 mt...

This is an interesting area of bulk shipping....one that isn't understood by all. I reckon I'll do another post or two on this topic and highlight a grey area that you may find interesting.

Geez sorry for the boring 'shipping only' post...

Anyone got any good jokes?

VS

Baltic Dry Index - Reuters

Baltic index slips on weaker capesize, panamax rates

http://www.reuters.com/article/2012/08/29/baltic-idUSL6E8JTII120120829

Wed Aug 29, 2012 11:26am EDT

By Koustav Samanta
    Aug 29 (Reuters) - The Baltic Exchange's main sea freight
index, which tracks rates for ships carrying dry
commodities, fell on Wednesday on lower rates for capesize and
panamax vessels.
    The main index, which factors in the average daily earnings
of capesize, panamax, supramax and handysize dry bulk transport
vessels, fell 6 points or 0.83 percent to 718 points.
    The overall index, which gauges the cost of shipping    
commodities such as iron ore, cement, grain, coal and
fertiliser, has fallen about 59 percent this year.
    "Overall the sentiment is still bad across all sectors.
Despite record scrappings, the order books remains very large
and most of the world remains either in recession or on the
cusp," Andy Jamison, shipping blogger and owner of the Virtual
Shipbroker said.
    "The entire industry should also be worried about the move
away from coal as a energy source - toward gas and natural
solutions. This will no doubt continue to have huge
consequences on dry bulk vessel demand into the mid and distant
futures." 
    The Baltic's capesize index dipped 5 points or 0.42
percent to 1,177 points. Capesizes typically transport 150,000
tonne cargoes such as iron ore and coal.
    Average earnings for capesizes, which have fallen about 88
percent so far this year, was up $21 to $3,296 on Wednesday.
    "Brokers explained the increase in rates on tighter vessel
supply as bad weather and typhoons led to delays, forcing the
miners to pay up for prompt tonnage," RS Platou Markets analyst
Frode Morkedal said in a note.
    China steel futures hit a record low on Wednesday before
paring losses at the close, dogged by weakening demand in the
world's top consumer that has pushed down the price of raw
material iron ore to levels last seen in 2009. 
    Shipments of iron ore account for about a third of seaborne
volumes on the larger capesizes, and brokers said price
developments remained a key factor for dry freight. 
    The Baltic's panamax index was down 24 points or
2.96 percent at 788 points. 
    Earnings for panamaxes, which usually transport 60,000 to
70,000 tonne cargoes of coal or grains, have fallen more than 52
percent this year.
    The panamax market remained slow with little activity in the
Atlantic on still slower coal and grain trades, analyst Morkedal
said. 
    Average daily earnings for handysize ships were down $66 to
$6,766, while those for supramax ships were up $6 to $8,966.
    Growing ship supply has been outpacing commodity demand for
some time and is widely expected to weigh on dry bulk freight
rates in the coming months.

 (Additional reporting by Nallur Sethuraman in Bangalore,
editing by William Hardy)

Why wont the shipbrokers return my calls?

The following email exchange is a typical one I have with Commodity Traders trying to enter the business.

 

Names and particulars have been changed a little to protect privacy

 

Quote

 

From: .......................

ent: Sunday, August 26, 2012 8:37 PM
Subject: Referral

 

Dear VS,

 

Thank you so much for your blog. I am just starting in the bulk commodity trading business and sometimes I struggle to understand what exactly the mails I receive mean. Last week I got a mail with questions regarding the shipping of an offer I am working on and I have to say that although I knew all the words I couldn't make sense of the whole text :-)) fortunately I found your blog and all the pieces fell into place.

 

I am writing to you because I need to find reliable (and efficient) ship brokers and you say on your web that you could help with this. As I said, I work with thermal coal, iron ore, grains etc shippings are mainly from the Americas’ to China.

 

I'm really new to this business, but what I have learned so far is that most of the offers for are FOB and most of the requests are CIF. The people I have worked with so far are slow to react (I'm still waiting for a quotation I asked for 10 days ago) so I think I should really try to build my own contacts with shipbrokers if I want to be successful. I would be really grateful if you could recommend me somebody.

Once again, thank you for your blog. You just don't know how much you have helped me already.

My best regards,

Jo Doe

 

++++++++++

 

My reply

 

Quote

 

Hello Jo

 

Thanks for making contact

 

I think I need to explain the process so that you can see why you are getting no replies.

 

Chartering a ship is a little (actually big) different to say booking a container for shipment. The difference is usually 1 million bucks give or take a few hundred thousand dollars. The other difference is that unlike container shipping where a broker or an agent quickly looks up a shipowner’s schedule of rates, in bulk shipping it can take days and many man hours for a shipowner to give you a freight rate.

 

These two things mean two important things for you as a prospective customer.

 

1. Shipbrokers and shipowners will not spend days giving/preparing rates for you unless you have credibility. Credibility is gained by either showing them that the business is already bought and sold (i.e. its firm shipping business) or unless you can prove that the deal is 90 pct chance of happening.

 

You may say in counter "how can I know if the business is workable if I do not know how much the freight component will be?” And the shipbroker and shipowner will reply "that’s not my problem but I am not going to spend 2 days doing your job for you. If you have no idea of the freight component then it shows brokers and shipowners that you probably are wasting everyone’s time"....

 

2. If you have never fixed a ship before then your chances of getting support / freight rates / shipowners interest is virtually zero again unless you prove some credibility. They will not hand over a 25 million dollar ship to someone who does not know what they are doing. They will also ask to see financials. Unless you have a few million in your bank then how do they know they will get paid?


Shipping payment terms are generally upfront - i.e. the moment the ship finishes loading. So if you as a trader are waiting for money to be received from the buyer after the ship discharges then this will not work (in terms of cashflow). You need money and / or access to credit. They also need to know that if something happens to the ship that they can sue you. If your company is worth usd 10,000 bucks then they won’t touch you..

 

Hope this explain why you are getting no answers...

 

If you can prove your credibility to me then I can for sure help you....but I don’t want to waste your time and the shipbrokers / shipowners I recommend

 

Cheers
VS

Best Invention for decades

Wish i had thought of that - The invisible bike helmet

Imagine if we could invent ones for ships just prior to a collision! Brilliant........oh and now i have come up with the idea..........dont try and steel it!

Difference between a "charterer" and a "shipper".

A question has come up with my latest group of brilliant students partaking in the popular VS DRY CARGO CHARTERING AND SHIPBROKING CERTIFICATE.

 

There was some confusion between the terms 'charterer' and 'shipper' - specifically when talking about the idea of 'deadfreight'.

 

To make things simple - the first distinction I need to state is that as a shipbroker and dry dry cargo shipping specialists contracts are always between 'charterers' and 'shipowners'. In other words for the purpose of a contract the word 'shipper' is irrelevant. Many think they can use the word 'shipper' and 'charterer' in substitution but you cannot. Shipper is not a word we use when discussing the commercial aspects a charter agreement.

 

Lets break it down...

 

A shipper is the party who supplies the raw materials to be shipped. They may or may not be the charterer.

 

EG...An African Mine sells it minerals to China. The Chinese customer buys basis fob and hence arranges the shipping.

 

Who is the charterer? Answer........The Chinese mine
Who is the shipper? Answer...........the African mine.

 

So in the charterparty the contract is between the Chinese mine (as the charterer) and the shipowner. The African mine is not a signatory to the shipping contract.

 

What complicates things a little is that in many cases the shipper is 'also' the charterer

 

EG An African mine sells it minerals to China. The Chinese client buys CNF and hence leaves the Africans to arrange the shipping. In this case the African mine is both the Shipper and the Charterer.

 

These distinctions can get even more complicated. Consider this scenario.
 

• African mine produces the minerals
• African mine has marketing agreement with large trading house eg Bunge which agrees to buy and sell all of the mines product on an exclusive basis
• Bunge sells the minerals CNF to Chinese Trading house (bunge organises the freight)
• Bunge is now the charterer and engages the services of a shipowner.
• Prior to ship arriving in China - Chinese trading house then sells the product to final user of the mineral (could be a steel company for example).

 

Above highlights the complicated nature of commodity transactions. But i like to keep things simple. Good rule for young shipbrokers.....avoid using the word shipper and only use the word 'charterer' when talking about the company that controls the cargo!

 

Hope this explains....if there are any questions then shoot!

 

VS

OUCH!

OUCH - I'm just saying

Some of you keen observers will notice that I have decided to focus on a tragic moment from the London Olympics rather than say a cyclist passing the finish line with arms raised, or a swimmer punching the water in Ecstasy after claiming gold. And yes you are right - that says more about me than you....

I have enjoyed these Olympics. So much drama, so many great performances and not just from the athletes. The media are gold medalists for sure. I love the focus on 'medal tallies'. Its a bit sinister - a little like a 'casualty' tally in times of war. Which nation is defeating the other!

Oh this is war.....make no mistake......national pride is at stake.

That brings me to Kazakhstan.....

Never in the history of the world has a country been more deserving of the acolades that it will now be afforded. The Borat series has only made this triumph so much sweeter. I love an underdog story and surely this is one of the greatest to be told!

Rumour has it the USA are looking at setting up European base of excellence in Astana the capital of Kazakhstan....just waiting for Senate approval.

Now back to my interest in my home nation - the landlocked Himalayan kingdom of Bhutan. Imagine my dismay in realising that "Sherpa hiking" (walking 200 miles whilst carrying 80 pounds on the back  whilst being shadowed by an over weight Westerner), "race the landslide" and "blue sheep spotting" failed once again to gain Olympic accreditation. The Russians and Chinese voting against. Alas our two athletes competed in archery but failed to make the finals.

It has been said though that our two athletes are by far the 'happiest' in the athletes village. An that is quite some feat considering the level of condom usage being reported on the wires.

At one point i wanted my daughter to be an olympian. Now i will push her to towards the arts....

VS

The Virtual Shipbroker and Reuters...

I was contacted recently by reuters to lend some commentary to the shipping markets...

So I will be one of their regular analysts...

This out today

Quote


Baltic index stays pressured on low demand

Wed Aug 1, 2012 4:10pm GMT
 


Print | 
Single Page

[-] Text [+] 


Aug 1 (Reuters) - The Baltic Exchange's main sea freight
index, which tracks rates for ships carrying dry
commodities, fell for a seventeenth straight session on
Wednesday due to limited shipping activity on sluggish raw
material demand.
    The overall index, which reflects daily freight market
prices for capesize, panamax, supramax and handysize dry bulk
transport vessels, lost 19 points or 2.12 percent to 878 points.
The index has fallen about 49 percent this year.
    "The Index is being pulled down by a mixture of sluggish raw
material demand, a continued oversupply of ships, the Olympic
games and the holiday season," Andy Jamison shipping blogger and
owner of the Virtual Shipbroker said.
    The capesize index was down 1.09 percent at 1,181
points. 
    Average daily earnings for capesizes, which usually
transport 150,000-tonne cargoes such as iron ore and coal, were
down $192 at $4,358. 
    Capes are down due to a very limited new enquiry out of
Australia and Brazil, Jamison said.
    "It may seem that players' focus is presently more on London
(Olympics) 2012 than minerals trading, and the absence of fresh
enquiry is adding further downward momentum in a segment already
under severe pressure," broker firm Fearnleys said in its weekly
report.
    Chinese steel futures fell nearly 2 percent on Wednesday,
snapping six consecutive sessions of gains, as
weaker-than-expected Chinese official manufacturing data dented
market confidence and rekindled worries about sagging demand.
 
    Iron ore shipments account for around a third of seaborne
volumes on the larger capesizes, and brokers said price
developments remained a key factor for dry freight.
    The Baltic Exchange's panamax index fell 2.85
percent to 954 points, with average daily earnings for
panamaxes, which typically transport 60,000-70,000 tonne cargoes
of coal or grains, down $225 at $7,612.
    "The coal market is in free fall and producers have even
started closing high cost mines, which was unthinkable six
months ago," Jamison of Virtual Shipbroker said.
    He noted that the poor demand in the U.S and high
inventories in China coupled with higher supply have led to a
fall in coal prices.
    "Most coal suppliers are still trying to sort out previous
positions rather than even looking at new sales," he said.

 (Reporting by NR Sethuraman in Bangalore; Editing by Alison
Birrane)
 
unqte

Pretty cool hey! 

Glad to have the worlds premier news service in Reuters as a supporter of this blog!

Baltic dry index, life and other catastrophes

Actually life is not too bad at all.

The BDI is hovering in a reasonable stable way at the 1,000 mark (give or take 10 pct each way).

I do not see to much movement in the foreseeable future. As we all know the BDI is a reflection of the supply and demand for bulk ships. On the supply side....still looks flat. Sure scrapping are up but the NB program is strong and will continue to be so for a few years yet. This over supply is more than soaking up the extra movement from our growth economies being China, India and South America.

There is lots of demand just not enuf to placate the hungry shipowners. I see that local Chinese shipowners involved in the Chinese coastal trade are now looking for 'international' options as demand levels for raw materials from inside china is soft to say the least. So we could see a massive spike of 10,000-50,000 dwt ships flooding the market in the short medium terms which isn't great if handy / handmax is 'your gig'!

++

The Olympics is about to start and readers of the blog will know that this makes me excited. I prefer to concentrate on the events but 1 day out it seems more a tabloid festival rather than a sporting event.

Who's shagging who in the village?
Who is tweeting stupid comments?
WHo is on steroids?
Who is fat and not in shape?
Which royal is having an affair?
Have you seen the Spanish uniforms (have not laughed like that for a while)

In Short - its all happening!

The elite Australian swimming team

I for one just wanna watch some contests with elite sportspeople......and I hope my country does well!

And fwiw I think London will produce the goods. Great city.......I wish i was a participant!

Nothing to do with shipping

But i like it

Shipping stuff...smooth sailing?

10 years is a long time in shipping.

Ok im going to sound like my grandfather here and tell you stories about how i used to walk 10 mile school every day and then do chores for 3 hours before being fed a bowl of murky chicken broth.

The shipping markets are about as confused and high risk as I could ever imagine.....

Think about this

China has held up the shipping industry (and in fact created a huge bubble) for over ten years now....and it seems that the current news from China is less than encouraging. Manufacturing is down, stockpiling is up and whether we like it or not they are hurting from the bad news emanating from Europe and the USA.

Europe is in disarray...the Greeks are heading back to the land, the Spanish only have their football teams to keep them sane, the British despite having the current leader of the grand tour (France) and a soon to commence Olympic bash, still cannot produce a Wimbledon Champion and the Germans are suffering from an attack of the Vettels......although the brightest prospect cannot seem to shrug off team dynamics! Even Russia is under water.....(our thoughts are with all of the above especially the British re Wimbledon)

Then theres the USA......people living in cars and the cost of a spleen operation now 100k.....

And its hot....damn hot.....too hot.....friggin hot.....so hot bears need help....

I wont eat you - just gimme your cola Slurpee, or some ice....how about a fan of some description?!

Then there's shipping

And now we have Shipowners around the world filing for bankruptcy left right and centre some with a mere 2 billion in debt .....thats small change surely....why are people panicking?

Imagine how many cities I could buy in the USA (since the housing crash) with 2 Billion dollars (say it like Dr Evil)...

Then we have shipping companies making news because they are expanding yet they have a senior management team that had previously driven similar companies to bankruptcy by taking too much risk with others peoples money....that just happened to be some of my money....

Does this all sound crazy? Yes...unusual? No....

If i had control of a shipping company right now (or a chartering company) my advice would be - no long term deals.....contracts dont seem to be worth much at the moment.

Having said that the current risky environment rewards gamblers......and shipping is full of gamblers.

Always has been....nothing new here.

I dont know about you - but i intend to keep making money....now and in the future...

I will also keep saving money for a rainy day....but i am old fashioned like that....Did i tell you about how as a young boy I was made to walk 10 mile to school?

Cheers
The Virtual Shipbroker

Some excellent questions posted in other threads

Deserve their own post

Quote

Informative and very captivating blog....

40 years of age and finally, I have managed to get into shipbroking. 25 interviews in 2 and a half months, I have now joined one of the largest brokerages out there (3 months in).

I was originally looking at getting into snp and have ended up on the dry cargo, supramax desk...(foot in the door).

With over 20 years in sales working up to middle management level (no direct shipbroking experience) I am now faced with having to start all over again. Not an issue for someone like myself who thrives on variety, new challenges at work and building good solid relationships with people (which I am sure this industry will satisfy).
I have managed to get my updating limited to mornings and am thereafter able to get on the phones to speak to charterers and shipowners.

Everything so far is going well. A bit more structure to my training would make the whole learning experience that much better...
My questions keep coming and the answers although limited, can be plentiful and very sporadic. Either too much info or not enough and coming from all angles... (Confused? So am I...)

What suggestions would you have so that I can get up and running in the quickest of times and use the information I am receiving in a practical manner?
Is there anything I should be doing alongside my work that would help the process along.

Many thanks for your comments
RJ

Unquote

Wow - great news RJ. Just goes to show that with the right attitude, broad skill set and a little bit of good fortune anything is possible. And well done on being flexible enough to handle starting from scratch again.

Yes the 'learning isn't very structured' is common complaint in shipping and hence the reason i started the VS dry cargo chartering and shipbroking certificate'.  Otherwise just stay positive, keep asking questions and the fixing will come!


+++

and another

quote

Thursday, June 14, 2012 3:36 PM

Anonymous has left a new comment on your post "Time Charter VS Voyage Charter":

I work for a company that is going to begin shipping a product from North America to Rotterdam. It will be dry bulk and hydrophobic. We are very new to the ocean freight game, I am curious as to whether we should become a member of the Baltic Exchange in order to educate ourselves and hopefully save some money.
Posted by Anonymous to The Virtual Shipbroker at June 13, 2012 7:06 AM

unquote


Hi There

I respectfully suggest you need to do alot more than that. Considering that freight will constitute a large percentage of the landed cost of your product...and the inherent risk associated with shipping you need to dedicate adequate resources for this function.

Yes you will need people with shipping expertise. If that is going to be you then yes yu need to be educated quickly and this is not always possible. Booking bulk freight is not like booking a container on a liner ship...

The difference - usually 1 million bucks give or take a few dollars.

So yes, get educated, hire shipping people, alternatively hire a consultant, and use a good broker. Joining the baltic exchange is a good thing but its mostly just a professional body. You need much much more.
++

Great posts - thanks for the contributions!

VS

Iron ore stock piles not good news

Iron ore movements are huge influences on the shipping markets and news out of china's major ports are that stockpiles are at record levels. This means that stock is not going out to the refineries and just staying at the ports. So although ship demand has been high up until now just about anyone in the know predicts a sharp drop in shipments over the following months.

Not great news and we should expect a weakening of freight rates.

Many of the Australian and South American mineral producers are predicting sharp falls in fob price of iron ore.

The good news is that the European Football championships, The Grand Tour (France) and the Olympics will keep me (and many of you) busy regardless of the market.

Interesting side note. I remember in the leed up to the last Olympics in China (this time 4 years ago)when the Chinese locked down the steel refineries around Beijing to help with the Pollution issues. That was judged by many to be the beginning of GFC part 1. The timing of current events seems that Olympiads are currently a bad Sign. Its not all bad news.......a low flying bird pooped on me today as i was heaving breakfast. I believe this is a sign of good luck!

lets see...

VS

Shipping Markets

See that markets are at low levels but remain firmer.

Ship Scrapping at record levels and new orders are virtually non existent.

I remember at the height of the market we saw a plethora (yes i know a few big words) of new shipbuilding yards arise from no where, and my feeling is we will see many disappear at the same speed.

Also interesting to see that capital markets are still tight and much more private money seems to be circulating for shipping investments. The current state of play in Europe is not helping this climate and should the Greeks do a runner....then who knows what will happen. Most of the contingencies have already been factored into markets but until IT actually happens no one knows for sure where this mess will leed.

Maybe 'short term pain" for "long term gain" is something we all need to get used too..


Also see a new report saying the strongest growing economies over the next few years promise to be Mexico, Chile and Australia. So in every bad market...there are always a few that buck the trend.

cheers
vs

The role of a shipbroker

An open question to the experienced shipping fraternity out there...

What is the role of a broker? Sounds like a simple question doesn't it....so let me flesh out the scenario a little.

It seems to me that due to the improvement and ease of communication, over the years, and also due to the boom market of the 'naughties' the ship chartering markets have morphed into 'one broker' markets.

20 years ago most deals contained 2 brokers - each representing (taking) a side.

So these changes, so it seems to me anyway, has made the role of brokers into facilitators and mediators - looking to keep both parties happy and somehow steering both towards a mutually beneficial agreement.

I wonder if this is the way the system is supposed to work? In many other commodity trades 'each principal' MUST have its own broker....the reason being is simply because negotiation SHOULD be adversarial...it should be a fight where brokers know who they are representing (no conflict of interest), and then in the wash up....a deal is reached.

Think of it a bit like the law, or a democratic parliament....both sides using everything they can to win!

As it stands, many brokers, in many deals are swinging in the wind, more politician than prize fighter...

I make a call out there to the shipowners and charterers who refuse to have more than one broker involved in any deal....

Who is your broker working for? You OR the other party?
Are you sure this is not 'false economies'?

Having worked as both principal and broker over many years I have seen how easily a broker can influence a negotiation....and i can tell you that when i negotiate these days, whether its a chartering deal, buying a house, buying insurance, trading equities, I always make it a priority to know who is on my side!

Discuss

The Virtual Shipbroker

Ship chartering corruption makes headlines

An example of alleged corruption in our industry. This is not the first or the last time you will here of this kind of behaviour....unfortunately if one were to dig a little similar types of relationships would pop up quite regularly me thinks!

Having said that must point out these are only allegations and this was reported in the news over the last week or so.

Quote

Oil giant BP has suspended a senior executive alleged to have taken cash payments in return for awarding multi-million pound contracts to a shipping company, the Daily Telegraph reported on Monday.Related News & Articles


OIL giant BP has reportedly put its global chartering manager Lars Dencker Nielsen on leave of absence as it investigates claims made by a whistleblower earlier this year that a senior manager offered favourable freight rates to a shipowner in return for cash.

BP Plc (BP/) said it’s investigating charges of bribery and corruption in a unit that charters oil tankers. The newspaper added: “The Danish national is alleged to have offered favourable terms to one of BP's shipping suppliers for cash. The allegations, under investigation, were brought to light by a whistleblower describing himself only as a BP employee.” ENERGY goliath BP said today it is investigating actions of its global chartering manager, after media reports alleged that he had taken bribes. An anonymous informant sent a letter to Chief Executive Officer Bob Dudley and the U.K.’s Serious Fraud Office saying that tanker contracts were awarded on preferential terms in exchange for cash payments to a BP employee, the Daily Telegraph reported today. “We can confirm that the chief executive’s office did receive a letter,” BP spokeswoman Sheila Williams said. “BP conducts its business to the highest ethical standards. We take all allegations of this sort extremely seriously and always investigate them.”


The allegations add to BP’s legal problems after the company this month agreed to a $7.8 billion payout to victims of the 2010 oil spill in the Gulf of Mexico, the worst in U.S. history. BP Shipping Ltd., the world’s second-largest charterer of tankers, said on Aug. 16 it lost $143.6 million in 2010 because of “challenging market conditions” and lower hire costs for tankers.

BP is the world’s third-largest hirer of tankers that carry crude oil after Royal Dutch Shell Plc (RDSA) and China International United Petroleum & Chemical Co., according to Poten & Partners, a New York-based shipbroker and maritime consultancy. The company’s shipping division chartered 422 crude oil tankers for single voyages in 2011, or 5 percent of all tankers reported as hired to the market.

Unquote

Interesting stuff..

If anyone else want to be a whistle blower - send me an email and ill sell the story to Murdoch...

Thats a joke off course


++

A happy student


Just in from a current student of my VS chartering and shipbroking certificate

quote

Having read numerous articles on the net , the ICS books as well as other so called ‘bibles ‘ like Maritime Economics by ‘the’ Martin Stopford of Clarksons, am the first to admit that the words don’t ingrain themselves the way your exercises do .

With your experience of ‘mentoring’ , you have a structured manner of introducing one topic after another which is difficult otherwise for us"..

Arun Nair - Australia

unqte

Thanks for the message Arun and yes key to the course is the structure....it flows in a way that hopefully makes sense, building on your knowledge on step at a time.


For those of you who are interested next intake will be September or October 2012


Cheers
VS

shipping expert witness

I have had quite a good response to the call for shipping experts for the VS expert witness database. Half a dozen experts and growing!

So if you are a shipping expert in any area whether that be chartering, operations, management, crewing, offshore, snp, broking, agency, containers, surveying, tankers, dry cargo, multipurpose...anything shipping related  - then get in touch with me at virtualshipbroker@yahoo.com

all geographical regios needed

And if you are a lawyer needing some expertise drop me a line..

Busy Busy Busy

I have been super busy recently...

Lots of work, lots of travel, 5 new awesome students, a house to build, and heaps of personal stuff going on...all of it good!

Some really interesting work developments. Despite a slow market quite a few new deals happening, some large some small. One thing that i am finding though is that despite the slow market the standard of some of the co brokers I am dealing with is sometimes hard to believe.

Guys with 20 years experience still not understanding some basic concepts and being sloppy with the way they go about completing deals.

Sloppiness is sometime forgiven when nothing goes wrong....but the moment something does go wrong and they inevitably do...bad work practices can come back to haunt...big time!

Good habits are important because brokers with good habits never seem to find themselves in trouble. Brokers with bad habits have a way of courting trouble.

This is nothing new in all aspect of life....

Geez im getting fired up for the olympics only 3 months away. I am one of those couch sloths who during both the world cup football and Olympic games would happily stay on a sofa 24/7 for weeks on end. All i need is a chest full of beer, some corn chips and the occasional change of clothes...

Taken last night. Vs unmasked!

And here you guys were thinking that i was a man of great sophistication....


VS

Expert witness shipbroking / shipchartering / maritime operations

One interesting part of the growing VS shipping consultancy business is the requests i have had either to be, or to provide, and expert witness for some commercial shipping disputes.

I am anonymous so a i cannot partake but I have been able to help out a small handful of lawyers by pointing them in the right direction.

So here is a bit of a call to the bulk shipping experts out there...

If you have excellent deap sea / commerical knowledge and fancy yourself as an expert in your field then drop me a line and i will put you on my database and you never know you might get some work.

So if you are a shipbroking, chartering, operational expert just about anywhere in the world send and email to virtualshipbroker@yahoo.com

Dry Cargo, Tankers, Off Shore, SNP, Derivatives ....backgrounds all wlecome to register..

Not only must you be a proven expert but your honesty and integirty should be without question...

Oh...and if you are a maritime lawyer in need of an expert you know your first port of call...Right Here!

Cheers
The Virtual Shipbroker

Laden legs or short period

Ok a interactive question for the readers..

One of my students is trying to get his head around the following problem

A charterer is asking the market for a ship basis 2 or 3 laden legs

the question is

Why does a charterer ask for 2/3 laden legs and why not just ask for short period?

I have a feeling that i am gonna have to explain this more....but please if you know the anser have a go!

When less is more

Had a meeting recently where as a third party i was able to sit back and watch the courting process from a fairly unbiased position.

Unfortunately for one of my principals, during the course of the informal meeting, it became apparent that, how can i say this tactfully.......i can't. Basically he just couldn't (or wouldn't) SHUT UP!

In an effort to push his business he forgot to listen to the client.

I have a general rule. If i go to a meeting and I have talked more than the client then i know its been a failure. A failure for many reasons...

1. Clients like to be heard and they, like most people like the sound of their own voices. If they are the client then that is their right!

2. If I have talked too much the chances are that in my excitement I have actually "failed to listen". Terrible outcome when as a service provider I am trying to understand the clients problems. And clients don't always TALK verbally....they communicate by the way they stay silent, move their hands, move their eyes, and by the way they sit...

For me I try to look out for all those clues. And in truth this is a skill that has helped me read situations that others fail to understand.

3. Generally if I talk too much I say the wrong thing! Eventually anyway..

So whats the moral here...

ITS NOT ABOUT ME (AND YOU)!!!! (its about the client)

Cheers
VS

It can't be? Can it?

As we all know the language of shipping is English. I for one can only speak English so i am lucky and in truth I greatly admire the many of you out there who are multilingual able to speak any number of the worlds great languages.

One of the by products of the English centric language of shipping is that many around the world Anglicise there indigenous names in order to make it easier for us westerners who have trouble pronouncing John let alone getting out tongues around Agyalka, Aaminah or Pavankumar.

Some people indeed take on entirely new 'western names" when entering the world of shipping.

This email just through from a shipping company in China - Enjoy

quote

Dear sir or Madam,

Glad to hear that you are on the makert of chemicals of DOP.We specialize in this field for several years,with high qulity and competitive price.

It's my honour to beon serve for you if possible,Sincerity hope to create a cooperation with you.

Best regards

Kobe Bryant

Nanjing Titan Chemicals Co.,Ltd

unquote

 

 

true story

 

 

Wait until ESPN hear about this

 

 

cheers

VS

"About Shipbroking Ltd" - real or a interesting experiment?

An Interesting development in the world of Shipbroking? Or just another entrepreneurial idea. I usually wouldn't touch this topic but a few people have contacted me asking my advice regarding the terms and conditions (if you can call them that) for a proposed new shipbroking company intent on world domination. They are currently advertising in tradewinds and they go by the name of "About Shipbroking Ltd"

here is the crux of the idea / proposal

(what they are sending potential employees by email without proper vetting)

1. They are looking to revolutionise shipbroking
2. They intend to be the largest shipbroker in the world across all markets
3. There is no salaries
4. You do all the work locally but hand over between 15-30 pct of commission to the parent company
5. In return they let you use their brand name and use their computer systems and back up staff
6. They domicield in the shipping tax haven of Greece
7. No mention of company structure or set up of management and how much control they do or do not exert
8. Bonus and share shcemes that reward loyalty and performance
9. They plan to hit the gound running 1st May 2012

This section is quite interesting

qte

DESCRIPTION OF EMPLOYER’S AND EMPLOYEE'S DUTIES
Subject to the supervision and pursuant to the orders, advice, and direction of employer, employee shall perform such duties as are customarily performed by one holding such position in other businesses or enterprises of the same or similar nature as that engaged in by employer.

Duties to be split as follows:

Employer                                                Employee

Position database update.                       Chartering or S&P.
Post fixture service.
C/P issuing.
Phone transfers.

Each party to provide and pay for the following:

Employer                                                                           Employee

Office in Greece.                                                               Local office (or work from home).
Fast internet connection in Greece.                                    Fast internet connection locally.
System server in Greece.                                                     Laptop or PC.
Phone expenses in Greece.                                                  Phone expenses locally (SKYPE).
Shipbroking software.                                                        Local taxes on compensation.
Travel and representation expenses                                     Pensions and health insurance.
for shipbroker dinners or big events                                   Travel and representation
representing the company, always                                      expenses for local or own client visits
subject to management approval.

If these above main terms involved can be of your interest, then please indicate your firm interest latest ........... 2012 in order that our new appointed managing director then can email you the full contract terms.

Best regards
Torben Jensen
Board member About Shipbroking LTD

unqte

So my read on this situation is as follows

A few shipping entrepreneurs with an idea and some cash have the following idea which for the boss's means very little ongoing work but the promise of passive cashflow moving forward.

1. Set up an office in the tax free haven of Greece
2. Employ 3 or 4 admin staff, rent a nice but small office
3. Invest in a fairly good shipbroker software package, servers etc
4. Convince brokers that there is a benefit from using said companies name, share info resources and back office staff
5. The tempting bit is there is not investment needed
6. The less than interesting bit is that brokers are basically working for commission only and if they do fix they need to give about shipbroker between 10 and 30 percent
7. Shipbrokers pretty much on their own in terms of cost, travel, training etc.

Look - my first impression is that this idea is quite interesting but then i realised a few things

1. this is pretty much a commission only deal where you keep most of it but you also do most of the work

2. How will the parent company split geographic and market regions. What if I choose say Singapore and another 10 people also want Singapore?

3. How will the standard of service / ethics / training be monitored? Companies run on reputations. If anyone can become a rep in an area how can i be sure the companies reputation will not be sullied and will not effect my business?

4. How will these guys in head office stop internal competition. Anyone in the markets should ask Platou or Clarksons or SSY how easy it is to get keep nice relationships between their own offices? This is not easy as they all compete for a limited amount of business...

5. A problem for About Shipbrokers is how do they stop brokers fixing outside their computer platform ie they use the About Shipbroker name to market their business and then when a lucrative client comes along they set up a separate email system and fix without About Shipbrokers being aware?

6. How does about shipbrokers stop brokers taking all the info, all the big clients and just leave when it suits them?

7. Who are "About Shipbrokers"? The name Torben Jensen is a famous shipping name but who are the backers and the other board members? Is this the Armada, clipper Torben or someone else??


There are many more questions here....the reason i know these issues is because I've thought about starting something similar under the VS banner but came to realise that the idea would be out of control pretty quickly.

Leading shipbrokers work very hard to guard reputations and create business's. They also reward employees with proper salaries not commission only deals. If you really want autonomy start your own business and keep all the spoils

The idea imo is a little bit too clever and lacks substance.

......thats my take anyway - Maybe we should call them ABOUT FACE SHIPBROKING...speak to the hand!

Cheers
VS